Standard Chartered Asian link a lure

When it comes to the future ownership of pan-Asian banking giant Standard Chartered, Neeraj Swaroop acknowledges many things are within the realms of possibility.

For the chief executive of Standard Chartered’s south-east Asian operations, that includes the prospect – however remote – of a bid by an Australian bank.

“Is there a possibility? There is always a possibility, but who knows," Mr Swaroop told The Australian Financial Review when asked if one of Australia’s big four banks could make a play for Standard Chartered.

“It is impossible for us to make a judgment. It is obviously interesting, but it is all speculative though. The fact that Standard Chartered is attractive to potential acquirers has been speculated upon for many years because we are unique. There aren’t too many banks like us that are so Asia-focused."

With a footprint in about 70 countries and a history in Asia going back 150 years, Standard Chartered has long been considered a prime target for bigger multinational banks with desires to expand in the region.

More recently, the rumour mill has been spinning on reports that Singapore investment fund Temasek is considering selling its 18 per cent stake, which is worth more than $9 billion.

While it is considered unlikely, the names of two Australian banks – ANZ and Commonwealth Bank – have been mentioned among those that could take an interest in Standard Chartered.

“For years since I have worked for Standard Chartered, it [a takeover] has been one of the favoured speculations for people because we are an attractively located bank," Mr Swaroop said.

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“At this point of the global financial crisis, we are still waiting to see how the world shapes up for financial services.

“It [a takeover of Standard Chartered] is ones of many things that could possibly happen, but there are a lots of things to debate and people have to work out their plans. Who knows, something could happen but something could not happen."

Outside of speculative acquisition talk, Mr Swaroop said the bigger push by Australia’s banks into Asia in recent years had been noticed, particularly as ANZ talks up its strategy to become a super-regional player. Still, Mr Swaroop said Australian banks were not viewed as a major competitive threat to established players in the region, for the time being at least.

“We view them [Australian banks] as very strong and well-run banks that have great credit ratings and strong capital," he said.

“Banking as a business takes time. At least in the immediate term, we see them as clearly partners as they grow into Asia. Over time, it depends on their strategy and how much they invest and whether they want to be local banks in each country."

“Our own presence in Asia has been built up over more than 100 years and we have strong local operations in different countries. Obviously, we bring value to the table that somebody that is new to a country does not have."

With Australia’s policymakers contemplating the country’s place in Asia through the new
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white paper, Mr Swaroop said it was important the focus extended beyond the major economies of China and India to fast-growing parts of South-East Asia. He pointed to Indonesia and the Philippines as two countries with close geographic ties to Australia that also had strong growth prospects.

“I think market forces today are in favour of greater integration and co-operation in the region," he said, “I guess Australian policymakers are seeing that as well and that is a welcome development. We do talk about China and India, but ASEAN [Association of South-East Asian Nations] as a grouping has also started to come of age."

Mr Swaroop said Standard Chartered saw Australia as an important growth market, a fact underscored by its purchase last year of Gryphon Partners, an advisory firm with a speciality in mergers and acquisitions in the resources sectors.

“Australia is a key part of our strategy, especially as Australia gets more linked in a business sense to Asia as it has been over the past few decades," he said.

“We are seeing growth in Asia and we are seeing growth of course in Australia, so at this stage we are looking forward to growing this piece of our business."